Spring-cleaning Your Finances
Spring’s arrival doesn’t just signal it’s time to “spruce up your home and organize your closets,” said Vera Gibbons in Market Watch.com. “It’s also an ideal time to clean up your finances.” Now that we’re three months into 2015, take a moment to refresh your budget for the year. Have you spent more or less than you anticipated? If you’ve veered off track for a specific reason, such as a job change, new baby, or a home purchase, revisit your spending so that you can meet your “current needs as well as shortand long-term savings goals.”
Next, turn to your retirement portfolio, said Kelly Campbell in USNews.com. “Start by adjusting your contributions to your 401(k) or retirement plan,” especially if you recently received a raise. The IRS has raised the maximum 401(k) contribution for 2015 to $18,000, and anyone age 50 or over can make a “catch-up contribution” of up to $6,000 for total annual savings of $24,000. And if you have money in retirement plans from previous jobs, now is a good time to think about whether it makes sense to roll them into a consolidated IRA, which may offer more investing options. You might also have time to cut your 2014 income taxes, said Eric Jones in KansasCity.com. “You can make IRA contributions for the 2014 tax year until April 15, 2015,” and you can typically deduct some or all of the amount, depending on your income level and whether you are covered by a retirement plan at work. Reviewing your insurance might also save you a bundle. If you’ve been with the same property and casualty insurance company for years, “you could be overinsuring, or underinsuring, your house.” Review your current policies, and then “get quotes from another reputable company or two to see if your rates are still competitive.”
If you don’t regularly monitor your credit, get your free annual credit reports from the three main credit agencies, said Erik Carter in Forbes.com. Up to 20 percent of consumers have errors on their credit reports, so now’s the time to “dispute any incorrect items you may find that could be hurting your score.” AnnualCreditReport.com is a good place to start. Finally, take a moment to protect your identity, said Jill Schlesinger in the Chicago Tribune. Change your passwords on your bank and credit card accounts and “install firewalls and virus-detection software” on your home computers. Then clean out your filing cabinet and “shred unwanted financial documents.” Even the IRS says the longest you need to keep old tax documents is seven years.
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